Sharp Drop in Dogecoin Demand: Nearly 70% Decrease in Open Interest Raises Concerns

Investor enthusiasm for Dogecoin is waning. Over 67% of the open interest in the meme coin has decreased in the past three months. In December 2024, it peaked at $4.07 billion. By February 2025, it had dropped to $1.33 billion. This significant decline reflects the increasing caution in the market. Many traders are withdrawing due to the growing uncertainty in the broader cryptocurrency market. A significant decrease in the Dogecoin open interest rate Interest rates measure the contracts currently active on futures and options exchanges. Typically, a decrease indicates traders closing or avoiding new positions. The 67% drop in Dogecoin's OI reflects weak investor confidence. Many people are currently shifting their attention to more stable investments due to market volatility. The decline in sentiment also aligns with a larger trend in the cryptocurrency market, where futures trading volumes have been affected recently. In contrast, Bitcoin and Ethereum still maintain higher open interest rates, while smaller altcoins like Dogecoin are experiencing significant declines.

Network Activity Slowed Down The network activity of Dogecoin is also decreasing. In November 2024, there were nearly 1.3 million active addresses. By February 2025, the number had dropped to 130,000, equivalent to a massive 95% decrease in just a few months. Fewer transactions imply that the number of users interacting with the system is decreasing. Data on the chain shows that Dogecoin transactions have become less frequent, indicating reduced participation from both retail and institutional investors. The decrease in activity also means fewer new investors are joining the network, which could limit growth potential in the future. Meme Coin Hiccup Continues Dogecoin is not the only meme coin facing difficulties. Other meme-based cryptocurrencies have witnessed significant price increases in 2024 but encountered headaches in early 2025. Many investors who participated in last year's price increase are now withdrawing money. The hype around meme coins seems to be fading, at least for now. Although some traders still find a glimmer of hope in meme coins, overall sentiment has become pessimistic.

Analysts believe that joke coins like Dogecoin could continue to lose value if they do not attract more new users or strong community participation. Additionally, as more projects emerge in the market, the battle for investors' attention becomes more challenging. ... But the Benefits of the Organization Still Exist Meanwhile, Dogecoin still holds appeal for some institutions, despite decreased OI and network activity. For example, Grayscale Investments established the Dogecoin Trust in January this year. This move indicates that larger buyers still believe in the potential of this currency. But it is unclear whether the organization's support can compensate for the declining interest of retail investors. Grayscale's participation indicates hope for the long-term existence of Dogecoin, but the real challenge will be whether frequent buyers will return to support this currency or not. If market sentiment recovers and the widespread use of cryptocurrencies increases, Dogecoin may revive. Until then, the future of this meme does not seem bright. But anything can happen in the cryptocurrency space.